Portuguese court drops market manipulation case against LSE academic

Reuters Staff

2 Min Read

LISBON, Oct 14 (Reuters) - A Portuguese court has dropped a case accusing a Canadian academic of market manipulation for predicting in a blog six years ago that Portugal would need an international bailout.

Peter Boone, a lecturer at the London School of Economics, co-authored blogs saying that, after Greece was bailed out by the European Union and the International Monetary Fund, Portugal was likely to be next. ( here )

The Lisbon criminal court issued a decision saying it had dropped the case, without elaborating. Public prosecutors can still appeal in a higher court.

The dramatic economic situation in Portugal in 2010 and 2011, when its bond yields rose sharply, making it hard for the state to borrow money, prompted sharp debate over forecasts made by overseas economists, who tended to be more pessimistic than domestic ones.

Portugal was forced to seek a 78-billion-euro bailout in April 2011.

Lisbon prosecutors had accused Boone of manipulating markets in order to benefit Moore Capital Management, a U.S. hedge fund.

Boone argued in the case that the blog postings had not made any investment recommendations and were based on publicly available information that was used by other economic commentators as well.

In a statement, Boone said the decision was a victory for free speech in Portugal and “guarantees that all specialists in the financial sector can continue to express their opinions on the economic and financial policies of the country freely and without fear of persecution”.

After adopting a series of harsh money-saving measures, Portugal exited the bailout in 2014.